Ethereum (ETH) On Track To Retest Support Turned Resistance


Ethereum Chart With Values

Ethereum (ETH) is at an interesting point. The correction is almost over and the price is now preparing to begin its new cycle. If we look at Ethereum (ETH)’s trading history, we will see that there are three phases of an Ethereum (ETH) cycle. If we consider correction to be the first phase, then we will see it followed by a gradual rally which is then followed by an aggressive rally. Now, most of these cryptocurrencies certainly have a lot of room for growth but they cannot just rise with the same pace. There is a limited amount of money that could possibly be invested in cryptocurrencies. Therefore, it is logical to assume that the rate of growth of the price of Ethereum (ETH) will decrease with the passage of time.

If we study Ethereum (ETH)’s past performance, we will see that this is exactly what has happened. The way this works is that Ethereum (ETH) breaks a long term trend line at each stage. The former trend line is always steeper than the latter. If we analyze the above weekly chart for ETH/USD, we will see that the trend line that extends from September 2015 to April 2017 was broken in September 2016. The price broke the trend line and corrected within the structure shown in red. After that, the price found a new trend line that extends from September 2015 to April 2019. Just as before, this trend line was broken in September 2018. You can see that both of these times, the trend line was broken in the month of September.

Ethereum Chart With Values

Same as before, the price corrected inside a red structure and has now found a new trend line. In all of these cases, you will see that the previous trend line (support) turns into a resistance that is eventually broken. When ETH/USD broke its trend line in September 2016, it tested the same trend line (now a resistance) later in April 2017. It succeeded in breaking this resistance and began an aggressive rally in May 2017. This time, Ethereum (ETH) is expected to test the support turned resistance in early 2019. Then in mid 2019, this resistance will be broken and Ethereum (ETH) will reach a new time high same as before. However, as you can see the trajectory keeps getting less steep and eventually Ethereum (ETH) will stop making 10x or 20x gains.

That being said, we are still a long way from any stability in the market. This market is still in its infancy and we are going to continue to see wild moves at least for the next few years. Every time before the beginning of a new cycle, we see the 10 Week EMA cross over the 21 Week EMA. If we look at Ethereum (ETH)’s past trading history, the price started to shoot up rapidly when the 10 Week EMA crossed above the 21 Week EMA in early 2017. This time, the 10 Week and 21 Week EMAs have gotten closer same as before. However, the crossover may not happen until early 2019. This means that the price of Ethereum (ETH) will most likely remain below $1,000 till the end of the year but will make a new high around mid 2019.

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